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HSAs Can Show the Way to Bipartisan Health Reform

The current system benefits those who need the least help. Here's an alternative both sides can agree on.
Let's make a deal.

Let's make a deal.

Photographer: Bill Clark/CQ-Roll Call

The Senate Republicans’ latest plan to overhaul Obamacare includes a significant expansion of Health Savings Accounts (HSAs), but exacerbates a key longstanding problem: HSAs provide significant tax benefits to those Americans who need the least help. That provides an opening for bipartisan compromise. Democrats and Republicans could find agreement on creating “equitable HSAs” -- that is, HSAs that are subsidized more equally for everyone -- to reform the healthcare system.

Twenty million Americans have HSAs. Participants in high-deductible insurance plans can contribute pre-tax dollars to HSAs and use those funds to pay out-of-pocket medical expenses. Patients are not locked into using only those providers that are “in network” and can price-shop between providers and between alternative courses of treatment. By giving consumers greater control over how their dollars are spent, HSAs hold the promise of allowing market forces to improve the healthcare delivery system.